Subscription pampering startup aglow raises $1.25 million from Tyro & Timely founders

A startup turning looking good into a membership has raised A$1.25 million in a push to rethink how we use beauty treatment services.

The round for aglow was led by Kiwi VC Icehouse Ventures via Brand Fund, a joint venture with NZ brand development firm Previously Unavailable, with support from Ryan Baker, founder of beauty-tech SaaS platform Timely, and existing investor Peter Haig, cofounder of Tyro.

aglow was founded by Karl Margrain and Jo Blundell, and launched in May 2023 as a subscription beauty membership platform with a focus on the supply side of the industry. It’s now being used by more than 600 salons and clinics, wth more than 5,000 members in Australia and New Zealand, with plans to expand into the US following the raise.

The platform set out to shift salon customers pay-as-you-go use to recurring revenue streams through client subscriptions and now generates more than $16 million annually in membership revenue. It tackles everything from creating personalised treatment plans and automated payments to client communications.

Karl Margrain, aglow’s CEO, said the membership model gives businesses a way to generate and predict recurring revenue for smoother cash flow.

“This $1.25 million funding round is a significant milestone for aglow,” he said.

“It will accelerate our mission to transform financial stability for beauty businesses. We’re excited to expand our impact across Australia and New Zealand, and this investment paves the way for our entry into the United States market.”

Margrain, who has a fintech background, sees aglow as bringing the lessons of gym memberships to beauty treatments 

“30 years ago gyms were predominantly pay-as-you-go, like beauty is today. Now, the recurring payment membership adoption across gyms is close to 100%. This membership movement we’re leading will be as impactful for this industry as gym memberships have been for the fitness industry,” he said. 

”With aglow, we have created a new category, and we are seeing our customers achieve phenomenal success with the membership model. A number are already generating more than $1 million in recurring revenue from aglow customers alone.”

Blundell, aglow’s chief revenue officer, has a CV that includes at Xero, Timely and CarbonCrop, says salons have experienced higher spends from the membership model, with customers spending 88% more on retail products, with their overall annual spend 45% higher than non-members, alongside higher rebooking rates. 

“I’m excited to bring insights from a decade of experience in beauty-tech to help support this operational transformation within salons and clinics,” she said.

Simon Pound, managing partner of  ventures at Previously Unavailable, said aglow will make memberships “the new normal” in the beauty sector.

“We’re thrilled to back aglow and this brilliant team as they scale their mission, changing the businesses and lives of beauty business owners,” he said.

“We have seen how creating recurring revenue for these mainly female-led businesses allows owners to get mortgages, growth financing and achieve higher valuations for their businesses, while at the same time providing their clients a more convenient way to pay and receive member benefits. It’s a true win-win .”